The world's largest crypto exchange, Binance, has now made it mandatory for all users in India—one of the world's largest markets—to re-verify their KYC. Let’s explore the key aspects of this decision:

Positive Aspect – Realistic Compliance with Regulations

     While Binance has always had mandatory KYC procedures, this new move appears to address the previous possibility of forged KYC declarations. It aligns with India’s stringent Anti-Money Laundering (AML) regulations, enhancing platform security and regulatory compliance. This could reduce the likelihood of financial crimes being conducted via Binance and may also instil a sense of caution among users.

Negative Aspect – A Challenge to User Privacy

     Crypto is inherently associated with financial privacy, and economic freedom; the KYC protocols strike at the very heart of these principles because personal data becomes more accessible to regulatory authorities. In India, crypto gains are taxed at a steep 30%, regardless of the amount, and there is a 1% Tax Deducted at Source (TDS) on every transaction, which significantly hinders Indian traders from competing internationally.

The Point is

      With increased transparency from KYC, tax obligations will tighten further, compelling Indian traders to slow down significantly—akin to a tortoise's pace.

Originally published on Wubits